Mayor Gray’s Testimony Before the Senate Environment and Public Works Committee Subcommittee on Fisheries, Water, and Wildlife

Mayor Gray’s Testimony Before the Senate Environment and Public Works Committee Subcommittee on Fisheries, Water, and Wildlife

Introductions

Good morning Chairman Boozman, Ranking Member Duckworth, and members of the Committee. I thank you for this invitation to give mine and the Conference of Mayors’ perspective on water and wastewater issues in the United States.

My name is Rick Gray and I am the Mayor of Lancaster, Pennsylvania. I have spent the last several years in negotiations with the Commonwealth of Pennsylvania and USEPA over Long Term Control Plans to solve combined and sanitary sewer overflow problems in Lancaster.

Let me start by commending Senators Fischer, Cardin, Brown, and other co-sponsors for introducing the Water Infrastructure Flexibility Act. This bill is a positive step toward acknowledging that as a nation, we need to approach our water and wastewater infrastructure and compliance issues in a much more practical and sustainable manner. Our communities and more importantly, our citizens, do not have unlimited funds to implement every rule and regulation in a silo, without considering what benefits might result. As we are fond of saying at the Conference of Mayors, “If everything is a priority, then nothing is a priority.”

This bill addresses many of the problems and solutions that are outlined in my testimony. It would also help reestablish the federal-state-city partnership where together we determine what investments need to be made first based on our environmental and public health priorities. Attached to my testimony is a letter signed by the Conference of Mayors, National League of Cities, and National Association of Counties that supports the bill and encourages all Senators to cosponsor this important piece of legislation.

Background Information

Green Versus Gray

The City of Lancaster, incorporated in 1818, serves as the seat of Lancaster County. The City has a population of approximately 60,000 and encompasses a land area of 7.34 square miles, nearly 50% which is impervious. The City is part of the Lower Susquehanna River watershed, the largest tributary draining to the Chesapeake Bay. Lancaster is one of about 770 cities with a combined sewer system (CSS), which drains approximately 45% of the land area of the City. Most of the time, the City’s Advanced Wastewater Treatment Facility (AWTF) is able to manage and fully treat the volume of water entering the CSS. However, intense rainstorms cause millions of gallons of untreated wastewater to overflow into the Conestoga River annually, much of which is runoff generated from impervious surfaces including buildings, streets, alleys, and parking lots.

The remaining areas of the City drain into a municipal separate storm sewer system (MS4), which must also meet water quality requirements as part of the Chesapeake Bay TMDL. The City has been proactively implementing a comprehensive stormwater program to improve water quality, meet regulatory requirements, and address local stormwater challenges using traditional “gray infrastructure”, as well as green infrastructure or “GI.”

Since 1999, Lancaster has been implementing a State-approved Long Term Control Plan (LTCP) and has invested $80 million in traditional gray infrastructure improvements to maximize the capture and treatment of combined sewage including a biological nutrient reduction (BNR) project that made the City’s AWTF the first system in the state to meet nutrient removal requirements. We are on the cusp of meeting the 85% capture goal set forth in that LTCP and CSO guidance documents from EPA. A list of these completed projects are presented in Exhibit 1 in Appendix 1.

Lancaster was at a proverbial fork in the road, knowing that the next logical iteration of gray technology projects was to invest up to $300 million in storage for the remaining combined sewage overflow volume – approximately 15% that is not already captured and treated. After more than a year of evaluation and planning by national experts in green infrastructure and many public input sessions with our residents and businesses, Lancaster determined that the best course of action was to pursue a $140 million investment in GI, together with other gray system improvements, such as selective sewer separation projects over the next 25 years.

So in 2011, Lancaster became the first Third Class City in Pennsylvania to adopt a Green Infrastructure (GI) Plan, establishing the framework for strategic and integrated stormwater management to reduce combined sewage overflows in a more cost effective and environmentally sustainable manner. GI reduces and treats stormwater at its source before it combines with raw sewage while delivering other environmental, social and economic benefits including protecting and improving water quality, providing natural stormwater management, and reducing energy use; neighborhood redevelopment, increasing recreational opportunities, and improving public health through cleaner air and water; and, reducing future capital and O&M costs that burden the rate payers from a totally gray infrastructure approach. Gray storage requires not only major capital investments to construct, it is an energy intensive solution requiring pumping stored combined sewage, which is mostly comprised of stormwater, to a treatment facility for further treatment before pumping the discharge to local waterways. Furthermore, the O&M costs for gray storage over the design life of that facility is likely greater than GI technology.

Since 2011, through concerted and coordinated project planning Lancaster is demonstrating that a comprehensive, integrated approach to stormwater management using GI can help to achieve clean water goals, by cost-effectively integrating GI into planned capital improvement projects to reduce the adverse effects of stormwater runoff. Lancaster has completed 45 GI projects at a cost of over $10 million that has captured 45 million gallons annually of stormwater. These projects are presented in Appendix 2. EPA Region 3 and EPA Headquarters have lauded our program and held up Lancaster as a model for other cities to replicate publicly since 2012. Yet the EPA/Department of Justice enforcement approach employs aggressive actions, rigid methods, and threats of large civil penalties to press cities like Lancaster to use costly technology rather than allowing time to implement a more sustainable (and affordable) integrated set of green and gray solutions.

And the process is very onerous. Since 2008, we have made over 15 filings with EPA and the State, have received 5 responses or comments from the agencies, and have had 20 meetings/calls/tours.

Lancaster’s story illustrates that a new direction for EPA is necessary: one that will allow cities like Lancaster the flexibility to opt for more sustainable and resilient GI technologies that will make their cities more livable and desirable for their residents and businesses. Lancaster’s residents have fully embraced this technology and, in fact, are demanding GI projects be built in their neighborhoods.

AFFORDABILITY

The median household income of Lancaster is significantly lower than most other cities in Pennsylvania, and it has significant poverty and disadvantaged populations compared to these other cities. 29% of Lancaster households have income less than $20,000. Lancaster also has a higher percentage of rental properties than the state average. These rental properties often house the lowest income households in the City. Since the beginning of Lancaster’s implementation of our long term control plan for our combined sewer system and replacements of our two water treatment plants with membrane filtration (due in large part over concern of the water quality entering the city from agricultural practices upstream of our plants), Lancaster has been forced to impose significant rate increases for water and sewer customers that disproportionally affect the disadvantaged populations in the City. See Exhibit 3. Future rate increases must reflect the reality of low income populations and their associated rate impacts. The conventional consent decree LTCP approach, requiring a minimum of 2% of MHI for rates, is not affordable for our urban centers that have the majority of the nation’s disadvantaged populations as their residents.

The United States Conference of Mayors (USCM)

I have attended many conferences and meetings with the USCM and other professional water organizations and can say with confidence that while every city has a unique story to tell, they also share much in common regarding the high cost and impossibly short time schedules to comply with aggressive controls of combined and sanitary sewer overflows, as well as stormwater regulations. The USCM has provided a series of mayors over the last five years to Congressional Committees testifying on behalf of Integrated Planning and the need for EPA to promote flexibility when implementing the Clean Water Act.

The basic message to Congress from the Conference of Mayors is that renewing the public water infrastructure simultaneously with delivering uninterrupted services including safe and adequate water is becoming less affordable; and unfunded mandates related to sewer and stormwater are expensive and may not address the highest local environmental or public health concerns of a city. Mayor David Berger appeared before this Committee in 2016 and stated “…we are on a dangerously unsustainable path when it comes to providing water and wastewater services in an affordable manner.” The situation has not changed appreciably for the better.

Local governments are stuck on an unsustainable financial treadmill when it comes to providing water and wastewater services; decisions made by Congress and the Administration to eliminate or reduce financial assistance without reducing unwarranted and costly mandates has placed a severe financial burden on our nation’s cities and our citizens.

The net effect of mandates and infrastructure investment (both capital and operations) puts cities in increasingly higher long term debt with accompanying rate hikes that have the effect of raising basic service rates to levels that are unaffordable to a growing percentage of the 80% of Americans served by these systems.

Some Solutions

Codify EPA’s Integrated Planning and Permitting Policy

Integrated Planning is designed to allow cities to develop comprehensive plans for their water, sewer, and stormwater needs, and establish a plan of investment over time to reach these goals. Cities should be able to sequence investments based on local priorities and on those issues that local government has identified to be of environmental and/or public health significance. And, cities and state and federal agencies, should be acutely aware of the importance of affordability to Americans served by public sewer/wastewater systems.

The Mayors believe that future investments should be prioritized to first ensure the sustainability of existing public water infrastructure and associated public health, economic and environmental benefits.

Additional improvements that will achieve additional benefits should be prioritized second.

Investments that do not have commensurate public health, economic and environmental benefits do not belong on the priority list.

Define Affordability and stop the use of Median Household Income (MHI) as the critical metric for determining investment level. It puts 50% of households on an unfair and burdensome financial impact.

State/EPA Enforcement to Achieve Long Term Control of Stormwater Through Permits

Cities need substantially more time to reach these unprecedented levels of control. That is what the experience has been in the cities with consent decrees. Local elected leaders have a documented record of directing public investments to clean and protect our lakes and streams, but we can’t get there if that means bankrupting our most vulnerable citizens with plans that overemphasize energy intensive gray infrastructure and downgrade the contribution of Green Infrastructure. Cities and their Mayors urge Congress to create a path to reach long term goals through the existing permit process rather than by way of consent decrees. Longer permit terms with compliance schedules, coupled with regulatory oversight and a commitment by cities to reasonable progress, is preferable to the consent decree model.

Renew Congressional Support for Exercising Flexibility in Existing Clean Water Law

The current Clean Water Act (CWA) allows EPA to use flexibility, some of which, it has neglected or refused to exercise. For example, the CWA allows EPA flexibility in water body attainment designations. EPA also can grant variances where compliance with requirements have overly-burdensome impacts on permittees.

A classic consent decree example is the Lima, OH case where there is a river that is designated as “fishable and swimmable”. The river in question dries up in the summertime and is only 4 inches in depth in the wintertime. No one will ever swim or fish there. Yet, the City is held to that standard of compliance and, as a result, a very costly fix.

Assessing City Fines in Consent Decrees

Eliminate civil penalties for local governments who develop an integrated plan and put good faith efforts and reasonable further progress into improving their water. Cities are not private entities where penalties impact our profit margin – Civil penalties only hurt the citizens, the customers, of our communities. Eliminating civil penalties is a change to EPA culture where officials may measure success in the high dollar amount of civil penalties and the high cost of compliance. Eliminating civil penalties can help reduce costs for a substantial number of our low- income citizens who spend a significant portion of their income on water and wastewater bills.

A recent review by the USCM arrays the civil fines for 31 local sewer/wastewater utilities that have completed a consent decree with EPA. The fines range from minor (Troy, ID, $14,500 2014); to severe (Delaware County, PA $1,375,000, 2015), (see Appendix 3). City consent decrees can be accessed using the hyperlinks in Appendix 4. Because EPA uses Median Household Income (MHI) to set expected compliance costs, those costs, as well as the civil fines, result in regressive and disproportionate impacts on low income households, but also creeps up to the middle-class households.

The regressive financial impacts of fines and compliance costs are illustrated for Delaware County, PA, (see Appendix 5). Delaware County was assessed a $1.375 million civil penalty in addition to the $300 million in estimated cost to comply with the consent order. To illustrate the disproportionate impact on residents, the USCM made 2 assumptions: 1- rates for residential customers are uniform, therefore payment of the fine is spread uniformly over all income groups. The same uniform distribution of costs applies to paying over time for the long-term compliance plan. The financial impact table in Appendix 3 indicates that nearly 70% of the fine and the long-term plan compliance costs will be borne by households with under $100,000/year; 57% of the fine and plan costs will be borne by households making under $75,000 a year. The County MHI is $64,174. Households with income of greater than $100,000/year contribute only 30% of the costs. Merely saying that each household will only be responsible for $6.72 in fine payment share ignores the fact that EPA is extracting $1.375 million, mostly from low and middle class households, for no environmental benefit whatsoever. There is no accompanying EPA rationale for why these limited resources are best spent on fines and overly costly consent decrees.

For many years cities relied on technical support from state and federal regulators concerned about public health and safety. The prevailing wisdom, and hence the most common practices, were to build infrastructure to move stormwater and sewage away from people and into treatment and discharge. Congress directed EPA to establish guidance on how cities should manage storm and sewer flows. The direction the EPA took was to aggressively enforce against cities to halt past practices in favor of control plans. The enforcement actions taken by EPA were based on use of their Congressional authority to fine cities. These fines are not the result of negligence or malfeasance on the part of cities.

Cities should be treated as the co-regulators they are—attempting to achieve the greatest environmental benefits they can with limited resources—rather than as criminals subject to costly enforcement actions that impose draconian fines and penalties. And finally, state and federal agencies should not substitute their necessarily limited economic and technical judgment for that of the communities who know their systems best.

Judy Sheahan is the Assistant Executive Director for the Environment for the Conference. She covers issues related to environmental protection, clean air, water, wastewater, and various infrastructure issues.